- After coming off a halt, Green Mountain (GMCR) is blasting off in response to news the company has formed a long-term alliance with Coca-Cola (KO) that will result in the latter acquiring a 10% stake in the former.
- Green Mountain will be Coke's exclusive partner for "the production and sale of The Coca-Cola Company-branded single-serve, pod-based cold beverages." The companies will also "explore other future opportunities to collaborate on the Keurig platform."
- Green Mountain's Keurig Cold single-serve beverage system, which will support Coca-Cola pods, is expected to launch in FY15 (ends Sep. '15). The system will make "carbonated drinks, enhanced waters, juice drinks, sports drinks and teas."
- Coke is buying Green Mountain shares at a price of $74.98. Based on AH levels, the company is already staring at a 49% profit.
- Though investors are naturally focused on other matters, Green Mountain is guiding for FQ2 EPS of $0.93-$0.98, below a $1.02 consensus. Y/Y sales growth is expected to be in the low-to-mid single digit range; the consensus is for 8.1% growth. GMCR's guidance excludes a 4% dilutive EPS impact from the Coke deal.
- FY14 EPS is expected to be in a range of $3.75-$3.85 vs. a $3.82 consensus. Sales growth is expected to be in a high-single digit range; the consensus is for 8.4% growth.
- KO +0.6% AH.
Green Mountain +38.3% AH in response to Coca-Cola deal
Feb 5 2014, 17:09 ET